Windows 7 leads the way to record quarter for Microsoft

Sales of Windows 7 and a recovering economy helped Microsoft set a record …

At the close of trading Thursday, Microsoft announced the results for its second quarter of fiscal year 2010, which ended December 31, 2009. Revenue of $19.02 billion, a 14 percent increase from the same period of the prior year, set a new a record for the company. The three other financial measures—operating income ($8.51 billion), net income ($6.66 billion), and earnings per share ($0.74)—all were up year-over-year, 43 percent, 60 percent, and 57 percent, respectively.

So what is Microsoft's explanation for the positive growth across the board? Its latest client operating system. "Exceptional demand for Windows 7 led to the positive top-line growth for the company," said Peter Klein, chief financial officer at Microsoft. Furthermore, the recession hit the holiday quarter pretty badly in 2008, and while Redmond could not avoid it, its reaction in the form of various cuts is now paying off. "Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth."

When discussing the results from two quarters ago, Microsoft said it would defer some $275 million of revenue from prepaid upgrades to Windows 7. Microsoft actually ended up deferring $1.71 billion in revenue, which is about $0.14 of diluted earnings per share, relating to the Windows 7 Upgrade Option Program and presales of Windows 7 to OEMs and retailers before general availability. Taking that number into consideration, the revenue would actually total $17.31 billion, or about $0.60 per share.

Microsoft will be discussing second quarter results and the company's business outlook on a conference call and webcast, which we are liveblogging.

Originally posted by Jackattak:Eloquently put, holy shitballs. I know my CEO's going to shit himself when he sees this, after selling all of his Microsoft stock last year claiming that "Microsoft is dead, dead, DEAD!"

Meanwhile I'm laughing all the way to the bank.

It would be an interesting list to see who predicted the death of Microsoft. Hope you all saved your bookmarks because this is a "told you so" moment.

Originally posted by Jackattak:Eloquently put, holy shitballs. I know my CEO's going to shit himself when he sees this, after selling all of his Microsoft stock last year claiming that "Microsoft is dead, dead, DEAD!"

Meanwhile I'm laughing all the way to the bank.

Um, now they just have to release WinMo7 and update both OSes every other year. I mean, a lot of this is deferred profit from people waiting for W7 but not upgrading to Vista, I think.

If they let W7 sit for another 5 years, expect to see a similar jump in sales 6 years from now.

Originally posted by Jackattak:Eloquently put, holy shitballs. I know my CEO's going to shit himself when he sees this, after selling all of his Microsoft stock last year claiming that "Microsoft is dead, dead, DEAD!"

Meanwhile I'm laughing all the way to the bank.

Big deal.

Their stock went from around $15 to $30.

Apple went from a low ~$80 back to $200+ after the stupid analysts predictions of doom due to the economy didn't materialize.

Originally posted by Jackattak:Eloquently put, holy shitballs. I know my CEO's going to shit himself when he sees this, after selling all of his Microsoft stock last year claiming that "Microsoft is dead, dead, DEAD!"

Meanwhile I'm laughing all the way to the bank.

Um, now they just have to release WinMo7 and update both OSes every other year. I mean, a lot of this is deferred profit from people waiting for W7 but not upgrading to Vista, I think.

If they let W7 sit for another 5 years, expect to see a similar jump in sales 6 years from now.

I am curious to see the profitability of all the PC hardware manufacturers.

Its nice that Microsoft did well this quarter with Windows 7 sales, but I think that comes at the expense of the hardware manufacturers who have razor thin margins and ever falling average selling prices.

I bet the % cost of Windows for a new PC is double what it was a few years ago.

If a PC retails for $500 who makes more on the sale: Microsoft or the OEM?

Originally posted by Jackattak:Eloquently put, holy shitballs. I know my CEO's going to shit himself when he sees this, after selling all of his Microsoft stock last year claiming that "Microsoft is dead, dead, DEAD!"

Originally posted by GuitarAficionado:Any reason the entertainment division and XBOX results weren't mentioned? Are they being saved for a gaming article? I thought the revenue drop was surprising/interesting...

Also interesting how that same division tripled it's net profit. Guess this is about the overall numbers.

Furthermore, the recession hit the holiday quarter pretty badly in 2008, and while Redmond could not avoid it, its reaction in the form of various cuts is now paying off. "Our continuing commitment to managing costs allowed us to drive earnings performance ahead of the revenue growth."

With that kind of revenues and net profit I'm wondering if it was even necessary to cut costs and people.

Their marketing director needs to be fired. Nobobdy publishes 6.66 billion profit! I still remember when the celeron was 667mhz for that reason alone. Did it matter that it really wasn't 667mhz - no! That's why their are no 13th floors in hotels. This just goes to show that Intel is from heaven and microsoft is from hell.

Originally posted by Major Gun:Their marketing director needs to be fired. Nobobdy publishes 6.66 billion profit! I still remember when the celeron was 667mhz for that reason alone. Did it matter that it really wasn't 667mhz - no! That's why their are no 13th floors in hotels. This just goes to show that Intel is from heaven and microsoft is from hell.

As I recall Dell shares dropped like a rock after the CEO was found to have stepped on a crack and almost broke his momma's back. Seems fair, really.

Originally posted by Major Gun:Their marketing director needs to be fired. Nobobdy publishes 6.66 billion profit! I still remember when the celeron was 667mhz for that reason alone. Did it matter that it really wasn't 667mhz - no! That's why their are no 13th floors in hotels. This just goes to show that Intel is from heaven and microsoft is from hell.

Silly me, here I was thinking that they came to the 667 number after rounding significant digits.

Btw, I love how you tied in hotels without any sort of logical relationship stated. Awesome feat. I'd like to subscribe to your political blog.